Autumn interest rate cut?

Mortgage rates look set to fall soon, after it was revealed last week that two members of the Bank of England's nine-strong monetary policy committee, which sets interest rates, voted for a reduction in the base rate this month.

'The two votes for a reduction at the MPC meeting signals that the committee is no longer focusing 100 per cent on maintaining or increasing rates,' said Stuart Law, managing director of property investment specialist Assetz. 'A 0.25 per cent drop is most likely after August.'

Homeowners looking to remortgage should wait and see what happens said Simon Tyler of brokers Chase De Vere Mortgage Management. 'Fixed rates are likely to fall as we go through the summer.'

Tyler believes rates could drop as low as 4 per cent from some lenders. Yorkshire building society was the first to react to the reduction in funding rates by reducing the cost of its five-year fixed-rate mortgage from 4.69 to 4.54 per cent.

Buy rather than rent - and save money

It costs £37,000 more over 25 years to be a tenant rather than a homeowner, according to Abbey's annual renting versus buying survey.

The average cost of renting a property in the UK over 25 years is £364,499 compared with £326,849 for buying a property with a mortgage - assuming a 90 per cent repayment mortgage at a fixed rate of 5.5 per cent and an annual inflation rate of 4.6 per cent - a differential that has reduced by 5 per cent over the past year as house prices and interest rates have risen.

Someone renting a two-bedroom flat - regardless of the location - would make the biggest savings by buying rather than renting, with the total 25-year cost working out 22 per cent higher for tenants.

The only property type that actually costs more to buy over 25 years than to rent is a four-bed detached house, where renting works out 1 per cent cheaper on average.

Sainsbury's dish up credit woe

Longstanding Sainsbury's Bank credit card customers are being penalised with a rise in interest rate on their cards effective from their July statements. The financial arm of the supermarket giant has written to a number of existing customers to inform them of a rise in the interest rate from 15.94 to 18.95 per cent for purchases on their card and from 16.95 to 19.95 per cent on cash withdrawals.

A spokesman for the bank said that the 3 per cent interest rate rise would affect fewer than 3 per cent of its cardholders, applying only to older cards issued as far back as 1997. A further tranche of customers with older cards will see a rise of between 1 and 2 per cent in interest charged, although the bank declined to say exactly who - and how many - people this would affect.

The bank said new customers would continue to be offered the bank's best buy table-topping 0 per cent on purchases for 12 months reverting to 15.9 per cent thereafter. The spokesman said that Sainsbury's was making the move in order to 'simplify its back book'.

Andrew Hagger, of data provider Moneyfacts, said people would do well to look round for a new deal: 'In the last few weeks, some of the major players in the personal finance market have voiced their concerns about increased levels of bad debt.'

'Customers affected by this increase could save themselves a lot of money by transferring their balance to a new card offering a 0 per cent balance transfer deal or a card with a lower standard rate - take a look at www.moneyfacts.co.uk best buys and you will see that there are still a number of cards offering interest rates in single figures.'